The Hindu Business Line : Fiscal deficit soars 52 pc in April

A SURGE in expenditure had led to an almost 52 per cent increase in the Centre's fiscal deficit during the opening month of the current financial year.

According to the Controller-General of Accounts in the Finance Ministry, the gross fiscal deficit for April 2004 mounted to Rs 25,998 crore from Rs 17,140 crore during the same month last year.

The revenue deficit (the gap between the Centre's current expenditures and revenue receipts) and primary deficit (revenue deficit net of interest payments) also stood higher at Rs 23,218 crore (Rs 16,340 crore) and Rs 18,401 crore (Rs 11,853 crore) respectively.

The main cause of higher fiscal deficit has been the Centre's total expenditure for April at Rs 30,277 crore, over 52 per cent more than the Rs 19,914-crore figure in April 2003.

Simultaneously, net revenue receipts of Rs 823 crore for April 2004 have been only marginally higher than Rs 576 crore for April 2003.

Huge corporate tax refunds and increased transfers to States resulted in a net tax revenue outgo of Rs 1,274 crore in April 2004, compared to Rs 1,074 crore earlier.

At the same time, non-tax revenues have been higher at Rs 2,097 (Rs 1,650 crore), leading to net revenue receipts of Rs 823 crore for April 2004.

The Centre's non-debt capital receipts have also been higher at Rs 3,456 crore (Rs 2,198 crore).

Within tax receipts, gross collections from personal income-tax and excise have been higher at Rs 3,254 crore (Rs 2,470 crore) and Rs 556 crore (Rs 358 crore) respectively, while Customs collections was Rs 3,458 crore, lower than Rs 3,522 crore in April 2003.

The fact that Customs revenues have been lower despite higher international petro-product prices and jump in non-oil imports is a reflection of the sharp tariff cuts undertaken by the previous Government in January.

Corporation tax revenues were in negative territory in April 2004, at minus Rs 3,765 crore (minus Rs 3,068 crore in April 2003), which is on account of higher refunds.

But on the whole, the Centre's gross tax revenues in April 2004 stood at Rs 4,461 crore, higher than the Rs 3,823 crore mobilised during the same month last year.

However, assignments to States were higher at Rs 5,729 crore (Rs 4,890 crore), resulting in net negative tax receipts of Rs 1,274 crore.